Kadant (NYSE:KAI) versus Spirax Group (OTCMKTS:SPXSY) Critical Review

Kadant (NYSE:KAI) and Spirax Group (OTCMKTS:SPXSY) are both mid-cap industrials companies, but which is the superior business? We will contrast the two businesses based on the strength of their analyst recommendations, institutional ownership, risk, earnings, profitability, valuation and dividends.

Earnings & Valuation

This table compares Kadant and Spirax Group”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Kadant	$1.05 billion	3.30	$101.97 million	$8.77	33.50
Spirax Group	$2.25 billion	3.01	$215.48 million	N/A	N/A

Spirax Group has higher revenue and earnings than Kadant.

Volatility and Risk

Kadant has a beta of 1.2, meaning that its share price is 20% more volatile than the S&P 500. Comparatively, Spirax Group has a beta of 1.06, meaning that its share price is 6% more volatile than the S&P 500.

Profitability

This table compares Kadant and Spirax Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Kadant	9.45%	12.13%	7.33%
Spirax Group	N/A	N/A	N/A

Dividends

Kadant pays an annual dividend of $1.44 per share and has a dividend yield of 0.5%. Spirax Group pays an annual dividend of $1.48 per share and has a dividend yield of 3.2%. Kadant pays out 16.4% of its earnings in the form of a dividend. Kadant has increased its dividend for 12 consecutive years.

Insider & Institutional Ownership

96.1% of Kadant shares are owned by institutional investors. Comparatively, 0.4% of Spirax Group shares are owned by institutional investors. 1.3% of Kadant shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Kadant and Spirax Group, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Kadant	0	3	1	0	2.25
Spirax Group	0	0	0	1	4.00

Kadant presently has a consensus price target of $341.50, suggesting a potential upside of 16.24%. Given Kadant’s higher probable upside, equities analysts clearly believe Kadant is more favorable than Spirax Group.

Summary

Kadant beats Spirax Group on 10 of the 16 factors compared between the two stocks.

About Kadant

Kadant Inc. supplies technologies and engineered systems worldwide. It operates in three segments: Flow Control, Industrial Processing, and Material Handling. The Flow Control segment develops, manufactures, and markets fluid-handling systems and equipment, such as rotary joints, syphons, turbulator bars, expansion joints, and engineered steam and condensate systems; and doctoring, cleaning, and filtration systems and related consumables consisting of doctor systems and holders, doctor blades, cleaning shower and fabric-conditioning systems, forming systems and wear surfaces, and water-filtration systems. The Industrial Processing segment develops, manufactures, and markets ring and rotary debarkers, stranders, chippers, engineered knife systems, industrial automation and control, recycling and approach flow systems, and virgin pulping process equipment for use in the packaging, tissue, wood products, and alternative fuel industries. The Material Handling segment offers conveying and vibratory equipment, and baling products; and manufactures and sells biodegradable absorbent granules for carriers in agricultural, home lawn and garden, professional lawn, turf, and ornamental applications, as well as for oil and grease absorption. The company markets and sells its products, services, and systems through direct sales, independent sales agents, and distributors. The company was formerly known as Thermo Fibertek, Inc. and changed its name to Kadant Inc. in July 2001. Kadant Inc. was incorporated in 1991 and is headquartered in Westford, Massachusetts.

About Spirax Group

Spirax-Sarco Engineering plc provides engineered solutions it operates through three segments: Steam Thermal Solutions; Electric Thermal Solutions; and Watson-Marlow Fluid Technology Solutions. The company offers industrial and commercial steam systems, including condensate management, controls, and thermal energy management products and solutions for heating, curing, cooking, drying, cleaning, sterilizing, space heating, humidifying, vacuum packing, and producing hot water; electrical process heating and temperature management solutions, such as industrial heaters and systems, heat tracing, and various component technologies for industrial processes; and peristaltic and niche pumps and associated fluid path technologies, including tubing, and specialty filling systems and products for single-use applications. It serves pharmaceutical and biotechnology, food, beverage, oil, gas, chemical, power generation, healthcare, water and wastewater, buildings, mining and precious metal processing, semiconductor, and transport sectors, as well as original equipment manufacturers. The company sells its products directly, as well as through distributors. It operates in Europe, the Middle East, and Africa; the Asia Pacific; and the Americas. The company was founded in 1888 and is headquartered in Cheltenham, the United Kingdom.